What is Synthetix (SNX)?
Gold ingots

What is Synthetix (SNX)?

By PhoenixDev | CryptoWorld - CW | 22 Jun 2020


Synthetix is ​​a token trading platform built on Ethereum, whose functionality is to create 'synthetic assets' to track all kinds of things (such as coins, cryptocurrencies, precious metals ...). All of this is backed up by SNX tokens.

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Its Origin

Synthetix was born as a stablecoin project with the name of Havven. It was founded by Kain Warwick and later became DeFi (Decentralized Finance). Today Synthetix is ​​one of the largest DeFi projects, closing the year 2019 with more than $180 million in SNX tokens.

What are synthetic assets?

A synthetic asset is one that allows you to obtain the benefit of having an asset without having it. A little strange, no, if you can have the real asset, why keep the synthetic? More than anything, for example, not to deal with it. For example, you can have the benefits of trading gold without having to guard it.

How does Synthetix work?

Synthetix works on two tokens:

  • The Synthtix or SNX, is the main token, and is the one that allows you to create the synthetic assets.
  • The Synth, which corresponds to the synthetic assets created on the platform.

Users acquire and save SNX tokens with which they can create Synths that allow them, as we have seen, to track the price of other things. However, to ensure that the created Synths are fully backed up, the system will lock a SNX value of 750% of the value of the Synths that you want to create.

What can we do with the Synths?

Currently, you can make transactions with Synths and with inverse Synths (that is, to benefit from the depreciation of an asset) both in the most important types of currency, such as the dollar, U.S. dollar, the euro, the Australian dollar or the yen, such as cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Ripple (XRP) on Tron (TRX).

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How is SNX valued?

We have just seen how SNX tokens allow Synths to be coined for synthetic asset creation, and a decentralized synthetic asset system brings great benefits to the user. Therefore, these users will surely be willing to pay certain fees for these benefits in transactions with Synths, which will go to the owners of the SNX. The more people adopt this asset decentralization system, the more the value of the SNX will grow.

 


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PhoenixDev
PhoenixDev

A Mobile Developer interested on Blockchain and Cryptocurrencies.


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